Answer: $2,640
Calculations:
i. Calculation of Ending inventory for April:
Ending inventory for April = 20% of the May sales
Ending inventory for April = 16,000 units x 20%
Ending inventory for April = 3,200 units
ii. Calculation of Ending inventory for March:
Beginning inventory of April = Ending inventory of March
Beginning inventory of April = April sales units x 20%------------(1)
April production units = April Sales units + Ending inventory - Beginning inventory
April production units = April Sales units + Ending inventory - (April sales units x 20%)
Assume April sales units is 'S'.
13,760 = S + 3,200 - S*20%
13,760-3,200 = S(1-20%)
10,560 = S*80%
S = 10,560 ÷ 80%
S = 13,200
April sales units = 13,200
Ending inventor for March = 13,200 x 20% = 2,640 units.
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